276. Paper Prepared in the Policy Planning Staff1


A Strategy for the Next Two Years

We are in a strong position to leave a significant legacy. World trends are in our favor; we have accomplished much in the past six years. But we face major challenges, especially on the economic front and in Congressional support for our efforts; and there are certain isolationist tendencies in the public mood.
Our strategy is built around two major pillars: our ability to manage the Soviet security challenge; and maintenance of the open international economic system.

US-Soviet Relations

We are close to developing a “two track” approach to the competitive/cooperative struggle with Moscow. We need a legacy that keeps the heat on Moscow’s adventurism while reaching arms control agreements that stabilize the strategic environment.
The new Soviet leadership is more activated and overtly challenging than its predecessors—as seen in Gorbachev’s Vladivostok initiative of late July.2 But they are on the defensive economically and politically. They need a Summit; a breakdown in the dialogue would be very costly for them.
Arms control is only one component of a Summit agenda (along with regional problems, human rights, and bilateral issues). Our three primary objectives are to:
  • Enhance deterrent stability via significant reductions in Soviet first-strike capabilities, especially Soviet “heavy” land-based ICBMs.
  • Protect our vigorous research on advanced strategic defenses, to “enforce” reductions in Soviet missiles and make possible future well-founded decisions on strategic defenses deployment.
  • Handle INF so as to hold the confidence of allies and friends in Europe and Asia.

International Economics

In the corning months we must show global vision in handling major economic challenges:
  • U.S. trade and budget deficits;
  • the reluctance of Japan and the FRG to accelerate domestic growth;
  • slow growth in debtor developing countries.
At home, there will be continuing pressures for protectionist measures and indiscriminate foreign affairs budget cuts.
In 1987, we must expand an open international trading system. This effort must begin at home by:
  • rebuilding American export competitiveness;
  • defeating protectionism; and
  • bringing the U.S. budget deficit under control.
We must also push developed and developing countries to promote growth and support a more open international trading system:
  • Developing countries must base their economies more on market/private sector forces.
  • Industrialized countries (especially Japan and the FRG) must grow faster to help the U.S. pull the world’s economy along.
We must stress to our public the importance of the new GATT round3 for enhancing the competitiveness of our international trading position.
We also need to demonstrate success in our approach to the international debt problem by:
  • Nurturing the reform efforts underway in developing countries; and by:
  • Encouraging “new” capital inflows to key debtor countries.

Consolidating Key Foreign Policy Gains

We have to devote certain efforts to consolidating key foreign policy gains, or ensuring that important developments of recent years are not dissipated or reversed:
  • The Atlantic Alliance. NATO must develop a conventional arms control strategy (in part to counter Moscow’s activism on the issue), and work out a more equitable sharing of future security responsibilities.
  • The Middle East. Progress in the Peace Process will only come in small incremental steps. We must promote Israeli-Jordanian cooperation on the West Bank, create an alternative Palestinian leadership to the PLO, preserve the Egyptian-Israeli relationship, while continuing to meet Israel’s needs.
  • Central America. We must keep the heat on the Sandinistas and reverse the consolidation of a Communist government on the American mainland. A successful Nicaraguan resistance is needed to undermine Soviet attempts to outflank us by subverting democratic transitions.

We should further isolate the Sandinistas by convening a Summit of Central American democratic leaders next year to further promote regional security cooperation and economic growth. We also should exploit Cuban and Nicaraguan economic vulnerabilities.

  • We must further “internationalize” the US-Japan relationship. Tokyo should provide more economic support funds to key countries, and expand Japan’s imports to help “pull along” LDC economic growth.
  • The Chinese cannot be happy with a more active Soviet presence in Asia, despite Gorbachev’s troop reduction teasers. And Moscow’s Asian allies are somewhat nervous about Soviet efforts to improve relations with China. We should work with the Chinese to weaken Soviet influence in North Korea, Vietnam, and in India.
  • We must ensure that the democratic transitions in Haiti and the Philippines do not fail; and we, have to manage a difficult leadership transition in South Korea.
  • Our efforts against terrorism and the international drug trade must be sustained.
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Political Defense

Some issues will not be resolved quickly, but require defensive management as they could cause substantial problems:
  • On South Africa, we need a position on sanctions and negotiations which will hold domestic and allied support and preempt mindless pressures, which will work against negotiations.
  • An Iranian victory over Iraq would be a strategic disaster. We must keep the Iraqis bucked up and limit Iran’s access to foreign arms.
  • We must keep pressures on Libya and Syria, to contain their troublemaking instincts.
  • We must stimulate economic reform in Mexico, and a return to democracy in Chile, to secure our long-term position in the hemisphere.


We can consolidate, under the President’s leadership, a record of major foreign policy accomplishments that enhance our security, alliance relationships, and trends toward democracy and economic reform. Our public mood is confident—despite some isolationist tendencies.
But we cannot be complacent. We must complete our “two track” approach to dealing with Moscow, defeat the forces of protectionism, and counter mindless Congressional budget cuts.
One initiative under consideration is a major Presidential speech on foreign affairs in 1987 (instead of the usual last minute “farewell address”) to give a big push to the remaining issues on our foreign relations agenda.
  1. Source: Department of State, Executive Secretariat, S/P Files, Memoranda and Correspondence from the Director of the Policy Planning Staff to the Secretary and Other Seventh Floor Principals: Lot 89D149, S/P Chrons SEPTEMBER 1986. No classification marking. Solomon sent the “brief point paper,” attached as Tab A, to Shultz under a September 6 covering memorandum, noting that Shultz was scheduled to give a 15-minute presentation on the administration’s foreign policy agenda to the Cabinet the week of September 8. Attached to Solomon’s covering memorandum at Tab B is an undated 14-page version of the point paper. (Ibid.) No record of Shultz’s briefing has been found.
  2. Reference is to Gorbachev’s July 28 televised speech in Vladivostok, in which he provided “a non-committal response” to the President’s July 25 letter regarding arms control, in addition to announcing the withdrawal of six Soviet regiments from Afghanistan by the end of the year. (Philip Taubman, “Soviet Announces Decision to Trim its Afghan Force: Gorbachev Tells of Plan: He Calls for Cut in West’s Aid to the Guerrillas in Return for a 6% Troop Pullout,” New York Times, July 29, 1986, pp. A1, A6) The New York Times also printed excerpts of the speech, as distributed in translation by TASS, in its July 29 edition. (Ibid., p. A6) The President’s July 25 letter is in Foreign Relations, 1981–1988, vol. V, Soviet Union, March 1985–October 1986, Document 254.
  3. See footnote 11, Document 248. The contracting parties to the GATT met in ministerial session at Punta del Este, September 15–20, 1986. On September 20, the 74 nations attending the meeting adopted a declaration that specified the beginning of multilateral trade negotiations, known as the Uruguay Round, which were to conclude in 4 years. The text of the declaration is printed in Department of State Bulletin, November 1986, pp. 46–49.